UAE Employee Cost Calculator
What an employee actually costs a UAE business once salary, allowances, visa, insurance and gratuity accrual are counted, per month and per year. Gratuity accrues on basic wage only, at roughly 5.83% for the first five years and 8.33% after, which is the single most common error in employer cost modelling. Cost of employment typically runs 1.20 to 1.35 times base salary for expatriate employees.
Step 1 of 3
Salary structure
Basic only. This is what gratuity is calculated on.
Step 2 of 3
Statutory and visa costs
A UAE national accrues GPSSA pension rather than end-of-service gratuity.
Work permit, entry permit, medical, Emirates ID, stamping. Varies by MOHRE company category. The employer must pay this — deducting it from salary is a MOHRE violation.
Mandatory nationwide since January 2025. Basic schemes start low; comprehensive family cover is considerably more.
Gratuity accrues at 21 days a year for the first five years and 30 days after.
Step 3 of 3
Other costs
Amortised over expected tenure, not charged to month one.
Total annual cost
AED 0
Enter your details to see the estimate.
| Breakdown | Per month |
|---|---|
| Basic salary | — |
| Allowances | — |
| Gross package | — |
| Gratuity accrual | — |
| Health insurance | — |
| Visa & work permit (amortised) | — |
| Air ticket (amortised) | — |
| Other | — |
| Total cost to employ | — |
| Cost multiplier | — |
| Against total package | — |
Calculated in your browser. Your salary data never reaches our servers, and nothing you type here creates a record.
This is an estimate based on the figures you entered, provided for guidance only. It is not legal, tax or financial advice, and it does not account for the terms of an individual contract. Confirm your position with a qualified adviser or the relevant authority before acting on it.
Visa cost bands by MOHRE category, current health insurance minimums and the ILOE position are pending confirmation against u.ae and MOHRE. Defaults below are starting points, not quoted figures.
The concept
What UAE employers actually pay
Beyond salary, six recurring costs.
Gratuity accrual — roughly 5.83% of basic in the first five years, rising to 8.33% after. It is a liability accruing monthly whether or not you provision for it.
Mandatory health insurance — nationwide since January 2025, from a basic federal scheme to comprehensive family cover.
Visa and work permit — varies by MOHRE company category, mainland versus free zone, and skill level. The employer must pay this; deducting it from salary is a MOHRE violation.
Air ticket — where the contract provides one.
Annual leave — 30 calendar days after one year. Not a separate cash cost, but a real capacity cost.
Emiratisation — companies above the headcount threshold face penalties for missed targets.
ILOE unemployment insurance is legally the employee’s cost, so it is excluded from the employer calculation above.
Show the working
The formulas
(basic ÷ 30 × 21) ÷ 12Gratuity accrual, first five years — about 5.83% of basic.(basic ÷ 30 × 30) ÷ 12After five years — about 8.33% of basic.visa cost ÷ (cycle years × 12)Amortised, not charged to month one.total annual cost ÷ annual basicThe cost multiplier.Worked example. Basic AED 10,000, housing AED 5,000, transport AED 1,500 — package AED 16,500. Gratuity accrual AED 583/month. Insurance AED 1,500/year is AED 125/month. Visa AED 5,000 over two years is AED 208/month. Total roughly AED 17,416/month, or AED 209,000 a year — a multiplier of about 1.74× basic, or 1.06× package.
Note both multipliers. Against basic it looks alarming; against package it is modest. Which one you quote changes the conversation, and finance teams use package.
The question everyone gets wrong
Gratuity is calculated on basic salary, not total package
An employee on AED 20,000 total with AED 8,000 basic accrues gratuity on AED 8,000.
Employers who model the liability on the full package overstate it by more than double. Employers who structure a low basic to reduce it should be aware that the ratio is visible in the employment contract, and that an unusually low basic can attract scrutiny.
The same distinction runs through the whole cost model: gratuity and leave salary follow basic; insurance, visa and Emiratisation follow the headcount. Confusing the two categories is why employer cost estimates are so often wrong in both directions.
Benchmarks
What the multiplier should look like
UAE cost of employment typically runs 1.20× to 1.35× base salary for expatriate employees.
Where a business lands depends mostly on insurance tier, whether an air ticket is provided, and expected tenure — short tenure spreads one-off costs across fewer months and pushes the multiplier up sharply.
Frequently asked questions
UAE employment cost questions
What does an employee cost in the UAE beyond salary?
Six recurring costs: end-of-service gratuity accrual, mandatory health insurance, visa and work permit fees, an air ticket where the contract provides one, annual leave capacity, and Emiratisation obligations above the headcount threshold. Together they typically add 20 to 35% to base salary.
Is gratuity calculated on basic or total salary?
Basic wage only. An employee on AED 20,000 total with AED 8,000 basic accrues gratuity on AED 8,000. Employers who model the liability on the full package overstate it by more than double.
Is health insurance mandatory for employees?
Yes. Health insurance has been mandatory for employees nationwide since January 2025, having previously applied in Dubai and Abu Dhabi. Cover ranges from a basic federal scheme to comprehensive family plans, and the employer provides it.
Can I deduct visa costs from an employee’s salary?
No. Recruitment, visa and work permit costs are the employer’s responsibility, and deducting them from salary is a MOHRE compliance violation. This applies whether the deduction is made at once or spread over months.
How do I accrue for gratuity monthly?
Take basic wage, divide by 30, multiply by 21, and divide by 12 — about 5.83% of basic a month for the first five years. After five years the rate becomes 30 days, or about 8.33%. Accruing monthly avoids a large unbudgeted charge when someone leaves.
What does a UAE national cost differently?
UAE nationals accrue GPSSA pension rather than end-of-service gratuity, with employer and employee contributions set by the scheme, and they do not require an employment visa. They also count towards Emiratisation targets.
What is ILOE and who pays it?
ILOE is the mandatory unemployment insurance scheme. The premium is legally the employee’s cost rather than the employer’s, which is why it is excluded from the employer figures above.